PRI Open to Oil Production Sharing in Energy Bill, Senator Says

By Adam Williams and Carlos Manuel Rodriguez -
Nov 14, 2013

Mexico’s ruling Institutional
Revolutionary Party is willing to expand the congressional
energy bill and allow risk-sharing contracts with payment in oil
production and not only cash as originally proposed by President
Enrique Pena Nieto, PRI Senator Francisco Yunes said.

“Risk-sharing contracts are on the table,” said Yunes,
who also heads the senate’s finance committee, in a Mexico City
interview. “There is support and consensus for risk-sharing
contracts to a certain point.”

Pena Nieto’s original energy bill presented to congress
Aug. 12 proposed profit-sharing contracts to private companies
and fell short of further reaching legislative changes hoped for
by the opposition National Action Party, or PAN. The model
proposed by the PAN would grant concessions to private companies
and offer broader operational control of oil.

PRI and PAN lawmakers reached a preliminary agreement last
week to support a measure that would allow the state to decide
the type of contracts to be offered for each project, including
service contracts, profit and production sharing and licenses,
according to three people who asked not to be identified as
talks are private. Pena Nieto’s energy bill in congress seeks to
end Petroleos Mexicanos 75-year state monopoly on pumping crude
to attract investment from companies like Exxon Mobil Corp. (XOM) and
Chevron Corp. (CVX)

Shale Gas

Lawmakers from the PRI and PAN are continuing to debate
concessions as well as licenses that would allow for the
exploration and production of certain hydrocarbons, such as
shale gas, according to PAN Senator Roberto Gil.

“The central element of the party consensus is to provide
investor certainty, particularly in the area of gas,” Gil said.
“We are still discussing the idea of introducing licenses that
assure the rights of the country but that also allow the private
company to invest and assume the risk.”

The energy bill in congress is likely to pass this year,
Gil said. Senator Armando Rios of the Democratic Revolution
Party, which has opposed constitutional amendments to energy
policy, said the party is seeking to delay the vote on the bill
until next year.